■Specific efforts to address human rights risks

With an emphasis on harmony with our business partners, MonotaRO strives to formulate guidelines and procurement policies that work towards developing an industrial society that considers the environment and human rights while implementing measures for compliance.

In our procurement policy, we have included co-existence and co-prosperity with our business partners, consideration of human rights and working environments, abiding by laws and maintaining confidentiality, and consideration for the environment. We established procurement guidelines for compliance with laws and regulations, human rights and labor, safety and hygiene, the environment, fair trade and ethics, quality and safety, information security, and management structure.

Based on its belief that facilitating business activities with an emphasis on sustainability will lead to the flourishing of all its suppliers and its own, MonotaRO enacted its Procurement Policy and Procurement Guidelines in April 2023.
These guidelines refer to the International Bill of Human Rights and the international standards related to labor set forth by the International Labour Organization (ILO) as the basic policy on human rights. Based on these, we convey our procurement policy, our approach to promoting sustainability initiatives, and the code of conduct we expect our business partners to follow.
These instruments are designed to clearly communicate MonotaRO's initiatives and requirements in a manner that is easy to understand for its business partners. When they come into effect, they will be distributed to and shared with all business partners.
When MonotaRO can have each of its business partners cooperate on all activities addressed in these Guidelines, it will lead to safer and more secure merchandise production and sales, which in turn will earn the trust and confidence of its stakeholders.

We have established procurement guidelines based on the following four main policies.
・Co-existence and Co-prosperity
At MonotaRO, we strive to attend to the following matters so that we can build sound partnerships with all business partners that will allow all parties to grow and flourish.

• 1. MonotaRO employees shall actively communicate their ideas to all business partners while also actively listening to their opinions in such a manner that maintains and improves the parties' mutual understanding and trusting relationships.
  
• 2. MonotaRO employees shall keep monitoring all business partners not only in terms of their quality, lead time, pricing schedule, technology, etc. But also the status of their social responsibility fulfillment while also practicing proper information disclosure with them so that all parties can engage in transactions with adequate knowledge and contentedness.
  
• 3. MonotaRO employees shall keep their fingers on the pulse of the industries in terms of environmental measures, technological trends, and changes occurring among customers with a view to innovating business procurement networks with all business partners and jointly developing a sustainable society.
  

　
・Awareness on Human Rights and Working Conditions At MonotaRO, we respect international human rights standards and the human rights of all working people and strive to implement working conditions that are safe and hygienic. In addition, MonotaRO believes in respectful treatment of all its employees as well as all its business partners with a view to realizing a society where all members respect each other's diversity.
　
・Legal and Regulatory Compliance, Protection of Confidential Information
MonotaRO has been able to grow as a business entity based on the trust cultivated through its compliance with applicable laws and regulations and proper information management. Therefore, MonotaRO's employees all recognize that we are all members of society and conduct procurement activities while fully complying with its laws, regulations, and norms.
　
・Environmental Measures
At MonotaRO, we actively address various issues related to the global environment on our own initiative while also remaining considerate of the environmental issues that are specific to each regional community so as to ensure the health and safety of the people who live there. MonotaRO also remains committed to providing ecological products to its customers.

We distribute procurement guidelines that cover matters such as anti-corruption, including bribery, to both new and existing suppliers. We also distribute and collect self-assessment questionnaires according to the content of the guidelines. As of August 31, 2024, we have distributed the procurement guidelines to approximately 2,500 companies. When signing business contracts with new suppliers, we ask them to agree to our procurement guidelines. Concurrently, we are investigating and examining auditing methods and other measures for the purpose of promoting sustainable procurement.
As a reference for our investigations, we conduct sustainability audits at some of our suppliers' manufacturing sites under our supervision. Items that we believe require improvement as a result of these audits are shared with our suppliers, whom we then request to make such improvements.
Furthermore, we hold several briefing sessions for our employees, including those in our procurement department, on our procurement guidelines and initiatives to deepen their understanding of them.

■Future initiatives
We are currently asking our suppliers for their understanding and approval of our procurement policy and guidelines, as well as requesting them to conduct a self-assessment questionnaire. If, based on the results of the self-assessment questionnaires and audits, we find that their efforts to comply with the procurement guidelines are insufficient or there are any items that are expected to require improvement, we will proceed to confirm, conduct audits, or request such improvements through dialogue.

Click here (Japanese Only) for more information on "MoRE!".

　

　

■Future initiatives
We will promote the following initiatives in order to become a company where all employees can play an even more active role while recognizing each other's diversity and making autonomous career choices by utilizing a receptive work environment based on our important code of conduct, "According Respect to Others."

　

■Promotion of Diversity and Inclusions (D&I)
At MonotaRO, “Diversity” means the different personalities of each and every employee who wishes to grow with us. We believe that we can continuously generate innovation through innovative and creative ideas by making maximum use of our personalities and committing ourselves to create a work environment where we can continue to play an active role.
In order to make maximum use of our personalities and to commit ourselves to create a work environment where we can continue to play an active role, based on our culture, in which "MonotaRO Recognizes Each Other’s differences" as one of our strengths, we have established three slogans ("MoRE!") to promote D&I and are taking various initiatives.

■MonotaRO’s Basic View on Employee Engagement
We believe that the improvement of mid- to long-term corporate value depends on the contribution of each employee. Therefore, we are committed to creating an environment where each employee is highly motivated to contribute to MonotaRO and can exhibit their abilities voluntarily.

Evaluation and Compensation System
We operate fair and transparent personnel evaluation and compensation systems based on each employee's performance, regardless of age, tenure, gender, or nationality. We conduct evaluations twice a year.

・Monthly Salary
The monthly salary is determined based on "job performance evaluation." In order to ensure fairness, we disclose the evaluation criteria within the Company. After conducting a mutual comparison and level adjustment within the department of the employee's self-evaluation and the superior's evaluation, we conduct mutual comparison and level adjustment across the company to determine the salary amount.In the "job performance evaluation," we decompose the contribution to the company resulting from the employee's job performance into six items: "organizational operation," "planning and execution," "business productivity," "reliability," "expertise," and "education and training," and evaluate each one and determine the monthly salary amount based on these criteria.

・Bonus
In addition to "job performance evaluation," we conduct "Objective evaluation" and determine the bonus by considering the respective evaluations of each employee and the achievement status of the company's performance (operating profit).In the "Objective evaluation," employees set objectives and their process checkpoints, aiming to improve the company's performance and organizational strength, as well as individual job performance improvement, along with their respective department and group objectives.After considering mutual comparison with the departmental level, followed by the department head's review, we make the final decision. We then evaluate the achievement rate after the end of the term. We carefully set and evaluate the objective accomplishment by monitoring the department and company's level.

・Restricted Stock Remuneration Plan to Executive Officers and Certain Senior Employees
We grant restricted stocks with the transfer restriction for the purpose of providing incentives for sustainable improvement of our mid- to long-term corporate value to executive officers and certain senior employees (once a year).

Bereaved family Compensation Program
We provide a bereaved family compensation program for the spouse and children of our employees in case of death.

• ・Bereaved family compensation: We provide the spouse with 50% of the employee's monthly salary at the time of passing for 10 years.
  
• ・Bereaved child compensation: We provide 100 thousand yen per month per child until the child turns 19 years old. However, if the child advances to a senior school such as a university, we extend the payment until a certain age under certain conditions.
  

The total amount of compensation under this program is limited to 1% of the net income after taxes of the previous year. The monthly payment limit and other details are specified in the "Bereaved family Compensation Rules," which we inform our employees.

Employee Stock Ownership Plan
In order to raise awareness of the continued sustainable increase of our corporate value over the medium- to long-term, we have established an Employee Stock Ownership Plan. We provide an incentive of 10% of the contribution amount as a grant from the company.

Retirement Benefit Program
As a system to support asset formation after retirement and provide death benefits during employment to our employees, we have established a retirement benefit program using an endowment plan.

・Outline of system of the Program
All employees are enrolled in a basic portion of the endowment plan, which the company underwrites. For those who wish to participate, we offer additional payment of the same amount of the employee-contributed premium. We allocate a portion of the death benefit of the endowment plan to the survivor compensation program for those who pass away during employment, and the maturity insurance benefit serves as retirement benefit after retirement age. For those who retire before reaching retirement age, they can receive a portion of the refundable payment according to the years of participation. Further details are specified in the "Retirement Benefits Rules," which we inform our employees.

Welfare
・Company housing systemSubsidize a portion of the rent or brokerage fees when occupying company housing.

・Education Support
Partial subsidies for taking online English/Chinese conversation lessons.

・Communication Activation Support
Subsidized expenses for social gatherings (up to a maximum).

Click here (Japanese Only) for more information on MonotaRO's Welfare&Supports.

■ Human Resource Development
We believe that in order for the contributions of our employees to enhance MonotaRO’s corporate value over the medium- to long-term to bear fruit, each employee must develop his or her work abilities, such as “the ability to be self-propelled,” “the ability to lead (both individual projects and the company on the whole),” and “the ability to innovate (the services we provide our customers, and ultimately society).”
To this end, we have created an environment in which these work skills can be acquired through everyday operations, supplemented by systematic training aimed at developing human resources for business growth. In concrete terms, we provide position and rank-specific training, including basic thinking skills, framework thinking, analogical thinking, project management methods, and workshops to share learning and results of solving business issues. In 2023, 1,184 employees participated in various training programs, with about 9,000 hours of training. Moreover, MonotaRO promotes the development of an environment that supports the growth of each employee from various aspects, such as the “One on one meetings,” which supports individual growth through dialogue, the “Growth Plan,” and the “Career Design Leave of Absence.”

To promote health management, we are working to improve the workplace environment and increase job satisfaction through initiatives such as promoting mental and physical health, balancing work and medical care, supporting employees when returning to work, conducting stress checks, and providing opportunities for one-on-one communication. By taking these initiatives, we aim to make a workplace environment where employees can work in good health and safety.
In addition, we have implemented a safety and health management system based on the Industrial Safety and Health Act to secure safe operations and hold monthly safety and health committee meetings in our distribution centers. Furthermore, we carry out safe operations based on the "Distribution Department Safety and Health Policy".

・Logistics Department Safety and Health Policy
By introducing safety management based on the occupational health and safety management system and voluntarily promoting continuous health and safety management, we aim to prevent occupational accidents, improve workers' health, and further create a comfortable working environment, thereby improving the health and safety standards of our workplaces.

■Logistics Department Safety anf Health Management System

* DC: Abbreviation for distribution center

■Key initiatives in occupational health and safety

・ Activities based on the Occupational Health and Safety Management System
We prioritize risk management in relation to occupational safety and health as a business priority, and are promoting the construction and operation of an occupational safety and health management system in accordance with the guidelines of the Ministry of Health, Labour and Welfare. We are also carrying out activities such as ensuring legal compliance, safety and health patrols, risk assessments and safety and health education, and are promoting continuous improvement activities aimed at preventing occupational accidents.

・ Risk Assessment and solid response
We conduct risk assessments based on the implementation standards we have established as internal company standards. We carry out risk assessments not only on a task-by-task basis, but also when introducing new machinery and equipment or when changing the layout of work areas, and we take measures to prevent accidents and occupational injuries from occurring from all angles.After risk assessment, we promptly implement risk reduction measures and manage risks. If an injury, illness or accident occurs in the course of work, it is promptly reported to the on-site manager, the distribution center manager and the health and safety team, and we take measures to deal with the occupational accident and mitigate its impact, as well as investigating the cause based on the health and safety management regulations and taking measures to prevent a recurrence. We also share information and measures between bases to ensure thorough risk management.

・ Health and safety education
As part of the statutory health and safety training given to new employees, they learn about handling heavy objects, the use of protective equipment, and the operation of general cargo handling equipment. In addition to classroom-based learning, we have set up a ‘safety dojo’ where trainees can learn about the main risks involved in on-site work through hands-on experience, and this has proved to be highly effective. We also provide a variety of other health and safety training, including heat stroke prevention training, forklift operator safety training, and AED/emergency life-saving training. To date, more than 1,500 people have taken part in these health and safety training courses.

・ Specific accident prevention measures
In addition to the initiatives mentioned above, we are also introducing the following initiatives as appropriate, and are continuing to make efforts to raise safety management standards by rolling them out across our bases.

• - HHK activities (activities to prevent occupational accidents and incidents based on near-miss and disturbing experiences)
  
• - Separation of vehicles and pedestrians (safety fences are installed at forklift operation sites in the logistics centers to prevent workers from coming into contact with forklifts)
  
• - Active Life Seminar for senior workers (activities to promote injury prevention through self-checking of physical condition, reflection on changes in physical and mental functions associated with aging, and reflection on lifestyle habits)
  

* Executive Officer, Human Resources & Organization Development

・Health-Related Indicators (from ESG data (English))

• * 1: Percentage of paid leave taken relative to paid leave granted in the current fiscal year (not including paid leave taken for leave granted in the previous fiscal year)
  
• * 2: The applicable period is from April of the current year to March of the following year.
  

■Evaluation by External Organisations

The foundation of our company's sustainable development is the continued existence and development of the community and society. Based on this belief, we have long been engaged in providing supplies in the event of a disaster and conducting volunteer activities in the community. Furthermore, since 2010, we have been supporting the development of human resources in the field of manufacturing, which is closely related to our business.

CSR activities
We have been continuously engaged in CSR activities since 2011 with the aim of contributing to the local community. We have established a CSR secretariat, and our office staff and volunteers conduct cleanup activities as well as weeding and facility repair work in response to requests from local nursery schools and other organizations.
For each employee, participation in these activities is treated as work for up to five days per year, and insurance is provided against injury or damage during the activities. Also, by sharing the participants' experiences and impressions of the activities and the knowledge gained from them, we have put in place a system to encourage further participation in volunteer activities and to apply such knowledge to future activities.
In 2023, a total of nine CSR activities were held, with a total of 50 employees participating and approximately 160 hours devoted to the activities. We also donate copier paper and lined notebooks that we cannot sell due to damage to the outer box, etc., and in 2023, we donated 15,000 sheets of copier paper and 43 notebooks to local childcare facilities and other institutions.

We have been co-sponsoring the “Kawasaki Robot Festival” since 2010 as part of our efforts to support human resource development for the promotion of the manufacturing industry and monozukuri (craftsmanship) in Japan. We are also participating in the “Rocket Partners for Everyone” program organized by Interstellar Technologies Inc.

　

　
　
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